Clause 1

Part of Debt Relief (Developing Countries) Bill – in a Public Bill Committee at 9:30 am on 9th March 2010.

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Photo of Sally Keeble Sally Keeble Labour, Northampton North 9:30 am, 9th March 2010

It is a great pleasure to serve under your chairmanship, Mr. Chope. I know that, given your interest in the Bill, all the issues will be aired and debated. I welcome the amendment, which is important. This is an historic Bill—it is the first to deal with this issue, which is a concern in a number of countries. We have an opportunity to get the Bill through by the end of this Parliament. Given the time constraints, it is important that the issues are aired and that people are clear about the Bill’s purpose.

The Bill has to provide for the orderly management of debt. There is a need for consistency and certainty, which is important for developing countries’ economic management and the risk premium they might face in the future. Therefore, having clarity on which countries are in and which are out is important.

The principle here is that the scheme as it was agreed by the World Bank is what should apply. If the scheme varies at some date, this legislation will not. The legislation is based on the 2004 ring-fencing of the HIPC initiative, so there is no question of revisiting the matter and including new countries, to a point—I will explain that more fully. Repeated assurances have been given, and the hon. Member for South-West Hertfordshire knows, that the measure applies not to future, but to historic, debt. That is because the HIPC process manages the debts of heavily indebted poor countries, so that they can start with a clean sheet and manage their economies in the future. If they take on further debt, they can do so on reasonable terms, and not be subject to the vagaries of misfortune to which they have been in the past.

There are two issues on the potentially eligible countries about which I think the hon. Gentleman is concerned, and which need some clarification. The HIPC initiative was ring-fenced in 2004, and if circumstances change after that it is a whole different ball game. There are some countries that might have been completely closed but might have been eligible for the HIPC initiative at the 2004 point, based on information that has come to light. The example that springs most to mind is Afghanistan, which, on the 2004 figures, qualified for the initiative. I imagine that Zimbabwe is the only country anyone can think of that is currently a closed society in which information is not known, that might be included on 2004 data. I suspect that if there was a big debate here about finding a proper way to manage Zimbabwe’s historic debts, people would accept that if we looked at the 2004 data and it applied, the country would go into a set process.

The only other possible circumstance would be a country that currently does not exist but for which there is data, and it is clear that on the 2004 data it would have qualified. Perhaps the only such country that one can think of is southern Sudan, and people would accept that, given the circumstances—depending on what happens, as there will be a referendum there—that might also be appropriate. It is not a matter of saying, however, that we will have a 2008 or 2009 cut-off point. The data that are used to determine whether a country is a HIPC were ring-fenced in 2004 and are therefore not open to variation. That provides a consistent and coherent way of dealing with the debts of a closed list of 45 countries, as set out in the explanatory notes.

The pre-decision point countries are well known: Comoros Islands, Eritrea, Kyrgyz Republic, Somalia and Sudan. We have a defined list of countries, historic debts and an agreed process, which has been scrutinised nationally and internationally. All that therefore provides the certainly that the hon. Gentleman seeks and the assurance that the measure will not spread to any list of countries drawn up on any criteria. The process is clearly defined, and that certainty will help to ensure that the money markets see that it is consistent and not whimsical. I hope that that also deals with the concerns about the risk premiums, and that the hon. Gentleman will withdraw his amendment.